House prices increase by 273% in 50 years

According to a new study by Halifax, house prices in the UK have increased by 273% in real terms since 1959 .

According to the study, once retail price inflation is accounted for, the price of housing has increased at an average rate of 2.7% a year, outstripping average wage increases amounting to 2% yearly.* The fastest increase in house prices occured between 1999 and 2009, when they shot up by 5% a year.

Meanwhile, access to council housing has shrunk. The percentage of the population living in council housing expanded throughout the 1960s and 70s, peaking at 33% in 1981. With the introduction to right-to-buy under the Thatcher government, and failure to build new social housing stock in recent decades, the proportion of the population in social housing now stands at 18%.

The increased proportion of owner-occupiers - from 43% in 1961 to 68% in 2009 - chimes with the picture of an increasingly debt-saturated economy, as easy credit fills the widening gap between increases in wages and the increasing cost of living.

*However, "average" wage increases frequently do not account for increasing levels of income inequality. "Average wages" are often the mean wage, meaning that a small section of the population enjoying significantly increased incomes can push up the "average" while the majority of the population experience meagre or nonexistent growth.

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Comments

Steven.

Jan 22 2010 17:13

this demonstrates something I basically tried to evidence in my account of agency work (http://libcom.org/library/shirking-9-5-diary-reluctant-temp) as a good illustrator of the fact that real wages have fallen significantly over the past 30 years. Buying houses used to be something which most workers could do,whereas for many young people nowadays it's not an option (myself and most of my friends included)

real wages have fallen significantly over the past 30 years.Buying houses used to be something which most workers could do

To some degree, though, haven't rising house prices allowed workers (those who are homeowners, anyway) to experience rising living standards, despite the stagnation or fall in real wages? I think that the contemporary notion of a home as an 'asset' which 'appreciates' and yields a profit on your investment has been an important factor in tying the British working class to capital.

yes, so the situation is actually more complicated than my post implied.

A better-off section of workers is created in this way, but now they are mostly older workers as buying a home becomes increasingly difficult. If younger workers now inherited their parents' houses in the future, then maybe this would not be that relevant, however due to cuts in care for the elderly, many older workers have to sell their homes in order to pay for their care in their final years, leaving nothing to be inherited.

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